Frasers Group is on the brink of moving from the FTSE 100 to the FTSE 250, following a significant decrease in its stock value over the past quarter.
- The company has seen its shares drop by over 10% in just three months, decreasing its market cap to approximately £3.3 billion.
- Tensions between Frasers Group and Boohoo Group have intensified, with calls for Boohoo’s chair to be replaced contributing to market instability.
- Frasers Group’s situation mirrors that of B&M, another retail giant facing relegation after its own share value decline.
- The upcoming quarterly index review is expected to confirm these changes in the FTSE listings.
Frasers Group is teetering on the edge of a downgrade from the prestigious FTSE 100 index, a shift prompted by a notable drop in its share price. Over the past three months, the retailer’s stock has decreased by more than 10%, pushing its market capitalization down to £3.3 billion. This decline positions Frasers for a likely movement to the FTSE 250 following the next index review.
At the center of Frasers Group’s troubles is its ongoing conflict with Boohoo Group. Recently, Frasers issued an open letter advocating for Mike Ashley to replace Boohoo’s current chair, Mahmud Kamani. Frasers, holding a significant 27% stake in Boohoo, expressed firm sentiments that “the chaos at Boohoo must end” and insisted Kamani “must go.” The ramifications of this public confrontation have unsettled investors, further impacting Frasers’ market position.
Similarly, B&M faces its own challenges as its shares have fallen by 21% over the last quarter, decreasing its market cap to £3.4 billion. The retailer recently reported an adjusted operating profit decrease of 1.8%, attributed to increased costs from store expansions and investments in its supply chain in France. This financial strain mirrors Frasers’ experience, highlighting a broader trend of volatility in the retail sector.
The upcoming review of the FTSE index is anticipated to reflect these shifts, with both Frasers Group and B&M poised to be reclassified into the FTSE 250. This potential relegation underscores the challenging conditions currently faced by retailers in the UK market.
The likely changes in the FTSE index listings signify a challenging period for both Frasers Group and B&M as they navigate market pressures.
